2024-06-17 00:54:07 ET
Summary
- MPV has delivered over 20% total return since the initial "Buy" rating, outperforming expectations.
- The opacity of private credit pricing raises concerns about potential overvaluation in the market.
- The high premium to NAV (8%) exposes the fund to significant price fluctuations during market downturns.
- The combination of tight credit spreads, stretched valuations, and a premium to NAV justifies downgrading the rating to "Hold."
Thesis
Roughly seven months ago, we started covering the MassMutual Participation Investors ( MPV ) fixed income CEF with a 'Buy' designation. The fund has outperformed since our rating, up over 20% on a total return basis:
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For further details see:
MPV: Moving This Credit CEF To Hold After The Large Premium Move (Rating Downgrade)